NEW YORK, Feb 20 (Reuters) - Sony Corp said it will
launch its next-generation PlayStation this year, hoping its
first video game console in seven years will give it a
much-needed head start over the next version of Microsoft's Xbox
and help revive its stumbling electronics business.

The new console will have a revamped interface, let users
stream and play video games hosted on servers, and allow users
to play while downloading titles as well as share videos with
friends. Its new controller, dubbed DualShock 4, will have a
touchpad and a camera that can sense the depth of the
environment in front of it.

Sony, which only displayed the controller but not the
console, said on Wednesday the PlayStation 4 would be available
for the year-end holiday season and flagged games from the likes
of Ubisoft Entertainment SA and Activision Blizzard
Inc, whose top executives also attended the glitzy
launch event.

It did not disclose pricing or an exact launch date.

Sony's announcement comes amid industry speculation that
Microsoft Corp is set to unveil the successor to its
Xbox 360 later this summer. The current Xbox 360 beats the
seven-year-old PlayStation 3's online network with features such
as voice commands on interactive gaming and better connectivity
to smartphones and tablets.

But all video game console makers are grappling with the
onslaught of mobile devices into their turf.

Tablets and smartphones built by rivals such as Apple Inc
and Samsung Electronics Co Ltd already
account for around 10 percent of the $80 billion gaming market.
Those mobile devices, analysts predict, will within a few years
be as powerful as the current slew of game-only consoles.

"It looks good and had a lot of great games but the industry
is different now," Billy Pidgeon, an analyst at Inside Network
Research, said of the new PlayStation.

"It'll be a slow burn and not heavy uptake right away."

MIGRATION TO MOBILE

Console makers will also have to tackle flagging video game
hardware and software sales, which research firm NPD group says
have dropped consistently every month over the last year as
users migrate to free game content on mobile devices.

PlayStation 4 will have an app on Android and Apple mobile
devices that connects to console games and can act as a second
screen, Jack Tretton, President and CEO of Sony Computer
Entertainment of America, said in an interview.

"Playstation 4 ... really connects every device in the
office and the smartphone and the tablet out there in the
world," Tretton said.

The console, which has been in development for the last five
years, will have 8 GB of memory and will instantly stream game
content from the console to Sony's handheld PlayStation Vita
through a feature called "Remote Play," the company said.

"What Sony is banking on is the ease of the use of this
system," Greg Miller, PlayStation executive editor at video game
site IGN.com, said.

After six years, Sony PlayStation sales are just shy of
Xbox's 67 million installed base and well behind the 100 million
Wii consoles sold by Nintendo Co Ltd, according to
analysts.

Tretton said it would be a big undertaking to manufacture
and distribute the console in Sony's four major markets by the
end of the year, adding that it would be a "phased rollout" that
starts before the end of the year.

Sterne Agee analyst Arvind Bhatia predicted Sony would
probably get a couple of million units of the PlayStation 4 out
by the 2013 holiday season and 7 million or 8 million out a year
later.

Sony also announced a strategic partnership with video game
publisher Activision Blizzard to take its Diablo III game to the
PlayStation 4 and PlayStation 3 consoles.

Activision's upcoming sci-fi shooter game "Destiny" in
development by its Bungie Studio will also be available on
PlayStation consoles.